Put NHS in charge of care homes 'to save billions', says Ed Miliband

The NHS would be handed responsibility for providing nursing home care for the elderly under a future Labour government in an attempt to constrain Britain's spiralling healthcare costs, Ed Miliband will announce today.

Under proposals to be set out by the Labour leader, councils would lose their historic role in providing social care for the local population. Instead, responsibility for "cradle to grave" health and social care would pass to the NHS in an attempt to make billions of pounds in efficiency savings.

The move will lead to accusations that Labour is proposing yet another complicated re-organisation of Britain's healthcare system at a time when budgets are already under huge pressure.

In a speech in Lancashire, Mr Miliband is expected to cite research suggesting that unless the Government improves the way services are delivered, growing care needs will leave the NHS with an annual funding gap of £29bn a year by 2020.

At present, while hospital and primary care is the responsibility of the NHS, the cost of nursing and social care is met by local councils. This means that some patients – many of them elderly – are kept for longer than they should be in expensive hospital beds as councils delay taking responsibility for their care, a problem known as "bed blocking". Labour's move could open the way for hospital trusts to diversify into social care and provide services more efficiently than at present.

Mr Miliband will announce the launch of an independent commission, led by a former Department of Health official, Sir John Oldham, to draw up detailed proposals for how the new system would work in time to be included in Labour's manifesto.

Aides emphasised that his announcement showed Labour could be trusted to look for savings in public sector spending and act in the best interests of patients. But Conservatives are likely to claim the move shows hypocrisy because Mr Miliband has angrily opposed what he has described as a Tory-led "top-down reorganisation" of the NHS.

Mr Miliband will insist that the proposed move is not top-down and is necessary so both services are affordable in an era when less money is available. He will say: "The NHS will always be a priority for a Labour government, but we must make every pound we spend go further. The changes we propose will save billions of pounds which can be better spent elsewhere."

The Labour leader will also argue that with a growing number of older people with chronic illnesses, it is no longer sensible to have different problems handled separately by different services. Instead, he will argue that the future demands "whole-person care" – an agenda that would bring together physical health, mental health and social care into a single service. "That means teams of doctors, nurses, social workers and therapists all working together," he will say. The Labour Commission will last a year and include representatives from the medical professions, social care, hospital management and academics.

* The former Chancellor Alistair Darling yesterday urged Labour to be cautious about committing itself to future spending plans amid a growing debate in the party over the issue. "I don't think my Labour colleagues need to take a position [on spending] until we see what the present government is proposing," he told Sky News, adding that the current environment was "very uncertain and unpredictable".

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